Ascend Health Founder Weighs In on What Changed After Sandy Hook

In the wake of recent national tragedies, the country and its leaders have begun to focus more attention on the treatment of the mentally ill.

At the same time, thousands of military members who have seen combat are returning to the U.S. from overseas deployments, with some of them likely to seek some form of mental-health treatment.

Richard Kresch

Against this backdrop, doctor and entrepreneur Richard Kresch has announced he will launch his third company to acquire or start up short-stay mental-health facilities that take a different approach to treating acute mental problems.

Kresch’s last company, Ascend Health, grew to be the country’s largest private psychiatric hospital company before it was acquired last year by Universal Health Services for more than $500 million. He spoke with VentureWire about his newest company, US HealthVest, which has launched with $36 million from Polaris Partners, Fidelity Biosciences and other investors.

This is your third company that will put you on the front lines of treating mental illness. How have things changed over the years?

It’s mainly society’s attitude toward mental illness and treatment that has changed. Because of these recent incidents [like the Sandy Hook Elementary shooting], there is a lot more focus on this issue right now. And in general, there is much less stigma today in seeking treatment for a mental problem. There is a lot more acceptance of the importance and effectiveness of mental-health treatment. More people seek treatment than in the past.

Are the federal health-care reforms going to affect your operations?

Definitely. For one thing, more people are going to be covered by insurance, which will reduce the amount of charity care we provide. Charity care has been a component of all of my companies, but there should be fewer such cases now. Millions of new people will be entering the system, including the mental-health system. But more of them will be covered.

Are there other external influences that will change your business model this time around?

There are health-parity regulations. These are regulations that establish parity between treatment for behavioral health and physical health. That means that caps and restrictions on mental-health care have been lifted, and there is more care and fewer limits on such treatment. Mental health problems are like other health problems, and should be dealt with the same way. It’s an example of the government’s changing attitude toward mental health.

The whole trend in mental-health treatment seems to be a move away from hospitalization and toward community-based care. Why open a bunch of new facilities?

That has more to do with long-term care. The clinics we operate are acute-care, people stay five to nine days. It’s emergency treatment for people who are suicidal or homicidal. Our role is to stabilize people until they are out of danger, and then connect them to longer-term care.

There has been a lot of talk recently about the dangerously mentally ill, deranged individuals who kill.

These people are the extreme cases. Some of them have suffered from chronic conditions. Others, though, have conditions that are manageable. For example, the guy who shot Rep. Gabrielle Giffords in Arizona. In his court proceedings, it has come out that when he is on his medication, he is more or less OK. When he’s off them, it’s trouble. This is an example of the kind of patient who can really respond to treatment. This is why it’s important that attitudes have changed, and seeking treatment is more accepted now.

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